ZCMA6062

Operations Management and Decision Making

KUIZ (QUIZ) 4

Nama (Name): FATIN HIDAYU BINTI ZULKIFLI No.Pel. (Stud. #): P117559

Multiple Choice:

1) The three major variations of online catalogs are

A) catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers
B) EDI, ERP, and ASN
C) cost-based, market-based, and competitive bidding
D) drop shipping, channel assembly, and postponement
E) all auction-based

2) Visibility throughout the supply chain is a requirement among supply-chain members for
A) mutual agreement on goals
B) mutual trust
C) compatible organizational cultures
D) local optimization
E) the bullwhip effect

3) Which of the following is not a concern of the supply chain?

A) warehousing and inventory levels
B) credit and cash transfers
C) suppliers
D) distributors and banks
E) maintenance scheduling

4) Which of the following is an aspect of environmental risk in supply-chain management?

A) political issues
B) management metrics
C) secure financial transactions
D) raw material availability
E) All of the above are environmental risks.

5) Toyota's policy of having two suppliers per component after its experience with fire and
earthquakes is similar to Hark Rock Café's franchising in societies that have significant cultural
or environmental barriers because
A) both companies are coping with environmental supply-chain risks
B) both companies are coping with process supply-chain risks
C) both companies are coping with control supply-chain risks
D) both companies are addressing outsourcing
E) None of the above accurately reflect the main similarity
6) McDonald's Russian "food town" is to __________ risk as Hard Rock Café's franchising in
diverse political and cultural environments to overcome barriers is to __________ risk.
A) process, environmental
B) control, environmental
C) control, process
D) process, control
E) environmental, control

7) What type of negotiating strategy requires the supplier to open its books to the purchasers?
A) cost-based price model
B) market-based price model
C) competitive bidding
D) price-based model
E) none of the above

8) Which of the following statements is true regarding the leverage of supply-chain savings?
A) Supply chain leverage is about the same for all industries.
B) Supply chain savings exert more leverage as the firm's purchases are a smaller percent of
sales.
C) Supply chain savings exert more leverage as the firm has a lower net profit margin.
D) Supply chain leverage depends only upon the percent of sales spent in the supply chain.
E) None of the above is true.

9) One dollar saved in purchasing is

A) equivalent to a dollar earned in sales revenue
B) worth even more than a dollar earned in sales revenue
C) worth slightly more than a dollar earned because of taxes
D) worth from 35% in the technical instrument industry to 70% in the food products industry
E) only worthwhile if you are in the 50% tax bracket and still have a low profit margin

10) Which one of the following statements about purchasing is true?

A) The cost of purchases as a percent of sales is often small.
B) Purchasing provides a major opportunity for price increases.
C) Purchasing is always more efficient than making an item.
D) Purchasing has an impact on the quality of the goods and services sold.
E) Competitive bidding is a major factor in long-term cost reductions.

11) Outsourcing
A) transfers traditional internal activities to outside vendors
B) utilizes the efficiency which comes with specialization
C) lets the outsourcing firm focus on its key success factors
D) None of the above are true of outsourcing.
E) All of the above are true of outsourcing.
12) The transfer of some of what are traditional internal activities and resources of a firm to
outside vendors is
A) a standard use of the make or buy decision
B) not allowed by the ethics code of the Supply Management Institute
C) offshoring
D) outsourcing
E) keiretsu

13) The Institute for Supply Management

A) establishes laws and regulations for supply management
B) is an agency of the United Nations charged with promoting ethical conduct globally
C) publishes the principles and standards for ethical supply management conduct
D) prohibits backward integration into developing economies
E) All of the above are true.

14) In supply-chain management, ethical issues

A) are particularly important because of the enormous opportunities for abuse
B) may be guided by company rules and codes of conduct
C) become more complex the more global is the supply chain
D) may be guided by the principles and standards of the Institute for Supply Management
E) All of the above are true.

15) Keeping a product generic as long as possible before customizing is known as

A) postponement
B) keiretsu
C) vendor-managed inventory
D) forward integration
E) backward integration

16) Which one of the following is not a supply-chain strategy?

A) negotiation with many suppliers
B) vertical integration
C) keiretsu
D) short-term relationships with few suppliers
E) virtual companies

17) A disadvantage of the "few suppliers" strategy is

A) the risk of not being ready for technological change
B) the lack of cost savings for customers and suppliers
C) possible violations of the Sherman Antitrust Act
D) the high cost of changing partners
E) All of the above are disadvantages of the "few suppliers" strategy.
18) The purchasing approach that holds the suppliers responsible for maintaining the necessary
technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is
A) few suppliers
B) many suppliers
C) Keiretsu
D) vertical integration
E) virtual companies

19) Which of the following is not an advantage of the "few suppliers" concept?
A) suppliers' willingness to participate in JIT systems
B) trust
C) vulnerability of trade secrets
D) creation of value by allowing suppliers to have economies of scale
E) suppliers' willingness to provide technological expertise

20) Which of the following supply-chain strategies creates value by allowing suppliers to have
economies of scale?
A) suppliers becoming part of a company coalition
B) vertical integration
C) long-term partnering with a few suppliers
D) negotiating with many suppliers
E) developing virtual companies

21) Which of the following is not a condition that favors the success of vertical integration?
A) availability of capital
B) availability of managerial talent
C) required demand
D) small market share
E) All of the above favor the success of vertical integration.

22) Which of the following best describes vertical integration?

A) to sell products to a supplier or a distributor
B) to develop the ability to produce products which complement the original product
C) to produce goods or services previously purchased
D) to develop the ability to produce the specified good more efficiently than before
E) to build long-term partnerships with a few suppliers

23) A fried chicken fast-food chain that acquired feed mills and poultry farms has performed
A) horizontal integration
B) forward integration
C) backward integration
D) current transformation
E) job expansion
24) Vertical integration appears particularly advantageous when the organization has
A) a very specialized product
B) a large market share
C) a very common, undifferentiated product
D) little experience operating an acquired vendor
E) purchases that are a relatively small percent of sales

25) A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to
distributors. This is an example of
A) horizontal integration
B) forward integration
C) backward integration
D) current transformation
E) keiretsu

26) Japanese manufacturers often take a middle ground between purchasing from a few suppliers
and vertical integration. This approach is
A) kanban
B) keiretsu
C) samurai
D) poka-yoke
E) kaizen

27) The Japanese concept of a company coalition of suppliers is

A) poka-yoke
B) kaizen
C) keiretsu
D) dim sum
E) illegal

28) Which of the following is not an advantage of a virtual company?

A) speed
B) total control over every aspect of the organization
C) specialized management expertise
D) low capital investment
E) flexibility

29) An advantage of a joint venture over vertical integration is

A) reduced risk
B) reduced costs
C) compromised competitive advantages
D) globalization
E) flexibility
30) When Daimler and BMW pooled resources to develop standardized auto components the
supply-chain strategy could best be described by
A) keiretsu
B) virtual companies
C) joint venture
D) vertical integration
E) few suppliers

31) Which of the following best describes Vizio's supply chain

A) few suppliers
B) keiretsu
C) joint venture
D) vertical integration
E) virtual company

32) Local optimization is a supply-chain complication best described as

A) optimizing one's local area without full knowledge of organizational needs
B) obtaining very high production efficiency in a decentralized supply chain
C) the prerequisite of global optimization
D) the result of supply chains built on suppliers with compatible corporate cultures
E) the opposite of the bullwhip effect

33) The "bullwhip" effect

A) occurs as orders are relayed from retailers to wholesalers
B) results in increasing fluctuations at each step of the sequence
C) increases the costs associated with inventory in the supply chain
D) occurs because of distortions in information in the supply chain
E) all of the above

34) A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as
usual. When this large order is sent to the distributer, the distributer assumes the large size is a
trend, not a one-time event. The distributer therefore places an even larger order with the
lobsterman. This is the result of
A) double marginalization
B) the bullwhip effect
C) CPFR
D) a pass-through facility
E) vendor-managed inventory

35) Giving quantity discounts based on annual volume instead of single order size helps to
control which supply-chain issue?
A) control risk
B) environmental risk
C) the bullwhip effect
D) unethical supplier behavior
E) vendor-managed inventory